Hyundai Oilbank, the nation’s fourth-largest refinery, signed a memorandum of understanding with Lotte Chemical for a $1 billion joint project on Wednesday. 

The two companies’ deal is to build a plant to produce mixed xylene, widely used for making plastics and synthetic fibers, as well as light straight-run naphtha, which is used to make petrochemical products.

The plant is scheduled to be fully functional by the second half of 2016. Both companies expect to save about 2 trillion won on imports.

Both companies look to benefit from exporting jet fuel and diesel which are byproducts of producing mixed xylene.

(injeongchoi@heraldcorp.com)